The Effects of Aging and Population Growth on Health Care Costs

Aging and population growth both contribute importantly to the rise in health care costs. However, the percentage contribution of these factors declined between 1970 and 1990, and we expect a continued decline through 2005. Data indicate that the relative costs of treating patients age sixty-five and over grew more rapidly than did the costs of treating other patients. Sensitivity analyses indicate that regardless of whether these trends persist, the percentage contribution of aging and demography is likely to decline between 1990 and 2005. Application of our model through 2030 suggests that if current trends persist, aging will cause a major acceleration in the rise in costs.